LONDON, Dec 5 (Reuters) - Italian banks are seen down 5 to 6 percent on Monday, according to traders, as potential political uncertainty in the aftermath of Prime Minister Matteo Renzi's resignation following a crushing defeat in a constitutional referendum clouds the outlook for a clean-up of bad debts.
Traders also saw European banks down 2-3 percent.
In a note to clients, Morgan Stanley said state aid at Banca Monte dei Paschi looked increasingly likely adding that the "No" vote made it more difficult for Italy's third-largest bank to find an anchor investor.
Italian banks are down nearly 50 percent so far this year. (Reporting by Atul Prakash, Editing by Vikram Subhedar)